EXHIBIT 99.1
THE KEITH COMPANIES | TKC
NEWS RELEASE FOR MAY 2, 2002 AT 7:30 AM EST
CONTACT INFORMATION:
THE KEITH COMPANIES, INC. ALLEN & CARON, INC.
2955 Red Hill Ave. Lynn Montoya (Investors), or
Costa Mesa, CA 92626 Lynn@allencaron.com
(714) 668-7001 Matt Clawson
(714) 668-7026 Fax Matt@allencaron.com
WWW.KEITHCO.COM (949) 474-4300
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Contact: Aram Keith,
CEO & Chairman of the Board
THE KEITH COMPANIES REPORTS FIRST QUARTER 2002 RESULTS WITH
NET REVENUE REACHING RECORD LEVELS AT MORE THAN $21 MILLION
COSTA MESA, CA (May 2, 2002) ... The Keith Companies, Inc. (Nasdaq: TKCI), an
engineering and consulting services firm, today announced that net revenue for
the first quarter ended March 31, 2002 reached record levels, increasing to
$21.4 million, up 29 percent from last year's first quarter net revenue of $16.6
million.
Net income for the first quarter of this year increased 5 percent to $1.44
million, or earnings per diluted share of $0.19 (based upon 7.8 million diluted
weighted average shares outstanding), as compared to net income of $1.37
million, or earnings per diluted share of $0.24 (based upon 5.8 million diluted
weighted average shares outstanding) for last year's first quarter. The 33
percent increase in diluted weighted average shares outstanding is predominately
due to the Company's Secondary Offering in May 2001.
Chairman and CEO Aram Keith commented, "The record first quarter revenue
results are the direct result of successfully implementing our acquisition
strategy of expanding our resources and geographic reach, while striving to
achieve a better mix of business from each of the main industries we serve. Our
overall results were positive, but mixed performance within some of our
operating groups led to a slight decrease in organic net revenue for first
quarter 2002 vs. first quarter 2001. We continue to monitor our SG&A costs and
have made prudent cuts recently to
help improve operating margins and better position the Company for the current
economic environment. It is important to note that we have continued to maintain
our operating profit margin at levels well above other companies in the
Engineering Services Standard Industrial Classification (SIC) code.
"During the first quarter," Keith added, "we experienced strong cash flow
by generating $4.4 million from operations and we acquired Michigan based ALNM
Group Inc. With forecasted annual net revenue approaching $100 million for 2002
and a strong balance sheet, we are well positioned to take the Company to its
next level of growth."
The acquisition of ALNM gives The Keith Companies a solid presence in the
upper Midwest region, strengthens its resources in the public works and
infrastructure industries and provides the Company with a springboard from which
to continue to pursue its plan of growth and diversification into the Midwest.
"It is difficult to predict with certainty the number and timing of any
future acquisitions," Keith said, "but we feel that our strong balance sheet and
in-place resources for due diligence and integration position us to continue our
strategy of acquiring companies that fit our target company profile."
The Company's March 31, 2002 balance sheet remains strong with cash and
securities of $20.4 million, a current ratio of 3.1:1, a debt to equity ratio of
0.03:1 and shareholders' equity of $55.2 million.
Gross profit in the 2002 first quarter increased to $7.0 million, up from
$5.7 million in last year's first quarter due to acquisitions. The Company's
SG&A expense increased to $4.7 million in the first quarter of this year, from
$3.3 million in last year's first quarter, due primarily to the added SG&A
expense from its acquired companies and costs associated with expanding the
Company's business.
NET REVENUE CONTRIBUTIONS FROM ACQUISITIONS
Acquired companies contributed $5.2 million in net revenue for the first
quarter of 2002 as compared to the first quarter of 2001. This $5.2 million
includes one month of revenue contributed by Hook & Associates Engineering, Inc.
(acquired January 2001), one month of revenue contributed by ALNM Group, Inc.
(acquired March 2002), and a three-month revenue contribution from both Pacific
Engineering Corporation (acquired September 2001) and Universal Energy, Inc.
(acquired November 2001).
FINANCIAL GUIDANCE
The Keith Companies' financial guidance for 2002 remains unchanged from the
guidance previously provided. The Company estimates net revenue for 2002 to
range from $92.0 million to $99.5 million with estimated diluted earnings per
share ranging from $0.87 to $1.00 ($0.21 to $0.25 for the second quarter, $0.25
to $0.29 for the third quarter and $0.22 to $0.26 for the fourth quarter) based
upon an estimated 8.0 million weighted average number of diluted shares
outstanding for the year.
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CONFERENCE CALL TO BE BROADCAST LIVE OVER THE INTERNET
The Company will be hosting an earnings conference call, which will be
broadcast live over the Internet at 8:30 a.m. Pacific Time on May 2, 2002 and
can be accessed by all interested parties at WWW.VIAVID.COM. To listen to the
live call, please go to the Web site at least fifteen minutes prior to the start
of the call to register, download, and install any necessary audio software. For
those unable to participate during the live broadcast, a replay will be
available shortly after the call for approximately seven days.
ABOUT THE KEITH COMPANIES
The Keith Companies, Inc. is a fully integrated, multi-disciplined
engineering and consulting services company, with offices located throughout the
Western and Midwestern United States. The Keith Companies' professionals provide
a wide spectrum of skilled resources including land planning, engineering,
surveying, mapping, environmental, and water and cultural resources, that are
needed to effectively plan, engineer, and design state-of-the-art facilities.
Additionally, the Company provides mechanical, electrical, chemical,
power/energy engineering, and other industrial engineering services to design
and improve the efficiency and reliability of automated and manufacturing
processes, production lines, and fire protection systems. The Keith Companies
benefits from a diverse public and private client base varying from residential
and commercial real estate projects to institutional, manufacturing, and
processing facilities. For more information visit the Company's website at
WWW.KEITHCO.COM.
Certain statements in this news release may include forward-looking
statements that express our expectation, prediction, belief, or projection.
These statements involve known and unknown risks, uncertainties, and other
factors that may cause the actual results, performance, and achievement of The
Keith Companies to be materially and adversely different from any future
results, performance, or achievement expressed or implied by these
forward-looking statements. Factors that may cause actual results to differ from
the forward-looking statements contained in this release and that may affect the
Company's prospects in general include, but are not limited to: changes in the
rate of economic growth in the United States and other major international
economies, our ability to sustain our growth and profitability, our ability to
implement our acquisition strategy and to successfully close and integrate
acquired companies on a timely and cost-effective basis, outcomes of pending and
future litigation, the ongoing financing of public works and infrastructure
enhancements and refurbishment, our ability to attract and retain employees, the
demand for electricity and the impact on power providers' plans for expanding
generation facilities, increasing competition by foreign and domestic companies,
a downturn in the real estate market, our failure to accurately estimate costs
on fixed-price contracts or contracts with not-to-exceed provisions, the
uncertain timing of awards and contracts, the ability to maintain acquired
companies' profit margins and/or client base, the short- and long-term impact of
terrorist activities and resulting political and military policies, and other
factors as are described in the Company's filings with the Securities and
Exchange Commission.
TABLES FOLLOW
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THE KEITH COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31,
------------------------------
2002 2001
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(UNAUDITED)
Gross revenue $ 25,904,000 $ 18,702,000
Subcontractor costs 4,509,000 2,080,000
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Net revenue 21,395,000 16,622,000
Costs of revenue 14,421,000 10,897,000
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Gross profit 6,974,000 5,725,000
Selling, general and administrative expenses 4,679,000 3,284,000
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Income from operations 2,295,000 2,441,000
Interest income 124,000 --
Interest expense 36,000 142,000
Other expenses, net 24,000 9,000
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Income before provision for income taxes 2,359,000 2,290,000
Provision for income taxes 920,000 916,000
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Net income $ 1,439,000 $ 1,374,000
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Earnings per share data:
Basic $ 0.20 $ 0.26
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Diluted $ 0.19 $ 0.24
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Weighted average number of shares outstanding:
Basic 7,310,790 5,243,887
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Diluted 7,755,839 5,839,877
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THE KEITH COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
2002 2001
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(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 12,172,000 $ 12,212,000
Securities held-to-maturity 8,232,000 11,521,000
Contracts and trade receivables, net 18,073,000 18,618,000
Costs and estimated earnings in excess of billings 10,502,000 8,270,000
Prepaid expenses and other current assets 1,788,000 1,458,000
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Total current assets 50,767,000 52,079,000
Equipment and leasehold improvements, net 5,202,000 4,921,000
Goodwill, net 22,662,000 14,252,000
Other assets 331,000 240,000
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Total assets $ 78,962,000 $ 71,492,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and
capital lease obligations $ 363,000 $ 459,000
Trade accounts payable 3,081,000 2,376,000
Accrued employee compensation 4,024,000 3,091,000
Current portion of deferred tax liabilities 3,739,000 2,028,000
Other accrued liabilities 2,810,000 2,961,000
Billings in excess of costs and estimated earnings 2,207,000 2,383,000
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Total current liabilities 16,224,000 13,298,000
Long-term debt and capital lease obligations,
less current portion 1,412,000 1,453,000
Issuable common stock 4,812,000 1,512,000
Deferred tax liabilities 1,092,000 1,271,000
Accrued rent 238,000 225,000
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Total liabilities 23,778,000 17,759,000
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Shareholders' equity:
Preferred stock -- --
Common stock 7,000 7,000
Additional paid-in-capital 42,108,000 42,096,000
Retained earnings 13,069,000 11,630,000
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Total shareholders' equity 55,184,000 53,733,000
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Total liabilities and shareholders' equity $ 78,962,000 $ 71,492,000
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